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Ineos, the industrial conglomerate led by billionaire Sir Jim Ratcliffe, has announced it will halt operations at its three manufacturing facilities in Hull. The company cites soaring natural gas prices in the UK as the primary reason for this decision. According to Ineos, gas costs in the UK are currently twelve times higher than those in the United States and eight times more expensive than coal-based energy used by competitors in China.
Sir Jim Ratcliffe expressed his frustration, stating, “We are being forced to mothball some of the most efficient plants in Europe, but with gas prices now 12 times the level in the US and 8 times that of China, we just cannot compete.” These plants are responsible for producing essential raw materials that support a wide range of industries across the UK and Europe, including pharmaceuticals, clothing, cosmetics, detergents, construction, and military explosives. Natural gas is critical to the production processes at these sites.
The decision to pause production impacts up to 1,000 employees, with 245 of them working directly at the Hull facilities. However, reports indicate that these workers will be retained while Ineos attempts to source liquefied natural gas (LNG) directly from the US, hoping for lower prices—a process that may take up to a year—or alternatively await a decline in gas prices. Meanwhile, Ineos is calling on the governments of both the UK and the EU, where the majority of its products are sold, to introduce tariff measures to shield domestic producers from competition with Chinese imports.
Among the three Hull plants, one produces acetic acid, used in items such as vinegar, paint, and glue; another manufactures acetic anhydride, a critical component in aspirin; and the third specializes in ethyl acetate, which functions as a solvent and in the decaffeination of tea and coffee. Sir Jim also criticized the government’s energy policies, describing them as “economic vandalism on an industrial scale.” He highlighted the nearly doubled wholesale price of natural gas in the UK and Europe since July, attributing part of the rise to disruptions in oil and gas shipments caused by conflict in the Strait of Hormuz following the US-Israel war in Iran.
Despite the challenges, Ineos emphasizes that its Humberside plants are among the world’s most efficient, boasting a carbon footprint half that of American plants and just one-eighth that of Chinese counterparts. Two of the plants have already ceased operation, with the third expected to follow shortly. This marks the second instance within a week of Sir Jim publicly criticizing government policy. Last week, he conveyed to BBC News his loss of confidence in the UK’s future, attributing the decline to factors such as high taxation and increased immigration. Sir Jim, whose fortune is estimated at around £15 billion, has been a contentious figure due to his outspoken views on immigration, Brexit support, and his relocation as a tax resident to Monaco since 2020.
The UK’s Department for Business, Innovation, Science and Trade acknowledged the situation, describing it as “a concerning time for workers in Saltend and their families.” A spokesperson outlined the government’s efforts to support the chemicals sector, including a £350 million fund for strategically important producers, trade protections on foreign chemical imports, and initiatives to reduce electricity costs through programs like the Supercharger and British Industrial Competitiveness Scheme aimed at maintaining competitiveness in the industry
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